FOREIGN INSTITUTIONAL INVESTOR

SUBMIITED BY: NISHITA PRADEEP SOLANKI

TYBFM SEM (V)

PROJECT GUIDE:

PROF: URVI JAIN

SUBMITTED TO: UNIVERSITY OF MUMBAI Rajasthani sammlelan‟s Ghanshayamdas saraf college Affiliated to university of Mumbai Reaccredated by NAAC with „A‟ Grade R.S Campus, S.V. Road, Malad (West), Mimbai-400 064 A.Y. 2013-2014

DECLERATION
MISS: NISHITA PRADEEP SOLANKI, A student of Ghanshyamdas Saraf College of Arts and Commerce, Malad (W). Here by states that I have completed my project on “FOREIGN INSTITUTIONAL INVESTOR” in the academic YEAR 2013-2014. This information submitted is true and original through best of my knowledge.

Date:

Signature of Student:

Rajasthani sammlelan‟s Ghanshayamdas saraf college Affiliated to university of Mumbai Reaccredated by NAAC with „A‟ Grade R.S Campus, S.V. Road, Malad (West), Mimbai-400 064 A.Y. 2013-2014

CERTIFICATE
I, Prof.Urvi Pillay here certify that Ms.Nishita Pradeep Solanki, a student of Ghashyamdas Saraf college of Arts and Commerce has completed the project on “FOREIGN INSTITUTIONAL INVESTOR” in the academic YEAR 20132014. This information submitted is true and original through best of my knowledge.

External Examiner: Date:

Principal:

Project co-ordinator: Date:

College seal:

ACKNOWLEDGEMENT

I take this opportunity to thank university of Mumbai for giving me a chance to do this project. I express my sincere gratitude to the principal Mrs.Sujata Karmarkar,course cocoordinators‟ Mr.Prasanna Choudhari, guide prof.Urvi Pillay ,librarian and other teachers for their constant support and helping me for completing my project. I am also great full to my friends for giving support in my project. Lastly I would like to thank each and every person who helped me in completing my project especially my parents.

Signature of student:

INDEX
TOPIC
Chapter 1 1.1 Executive summary 1.2 Objective of study 1.3 Introduction 1.4 History of financial institutional investors Chapter 2 2.1 Types of institutional investors 2.2 Regulatory overview 2.3 Advantages and Disadvantages 2.4 FII investment in India Chapter 3 3.1 Impact on stock exchange with special reference to BSE 3.2 Effects of Foreign institutional investors on Indian economy 3.3 BSE sensex & FII investment correlation Chapter 4 4.1 Review of literature 4.2 List of companies Chapter 5 5.1 Popular articles about foreign institutional invstors Chapter 6 6.1 Observation and Findings 6.2 Conclusion Bibliography

No.

Chapter-1 .

Data analysis of the project include Primary & secondary data. Executive Summery is a very important because the reader or user can know the details. Frequency distribution charts are used while analyzing and number so achieved are presented in a percentage form so as to represent it through graph. following method was adopted. .1EXECUTIVE SUMMARY Executive Summery is a brief introduction of each chapter. The appropriate methodology will improve the validity of the findings.1. objective etc of the report is a very useful to them on. It contains very few details of each chapter. Primary and Secondary The success of the analysis mostly depends on the methodology on which it is carried out. To complete the project successfully. RESEARCH METHODOLOGY:  Research Design Sources of Data : : Descriptive & Causal.

2OBJECTIVES OF THE STUDY The study helps the student to check whether the theory and practice actually matches.  There may be shift in foreign institutional investor from equity market to debt market.1. Organizational exposure helps the student to know how effectively they performed in the market.  Foreign institutional investors will have a great impact Indian economy .  To determine the part of foreign institutional investors.  To study in the concept of foreign institutional investors. . Data is collected related to the foreign institutional investors of Indian capital market from the Security exchange board of India.  Contribution of FII‟s in the stock exchanges and Indian capital market.

charitable societies etc. asset management company. Influencing the conduct of listed companies. Acting as savings pools. shall be deemed to be a Foreign Institutional Investor. Furthermore.” Institutional investors are entities that pool together funds on behalf of others. FOREIGN INSTITUTIONAL INVESTOR: The term Foreign Institutional Investor is defined by SEBI as under: "Means an institution established or incorporated outside India which proposes to make investment in India in securities. endowments. Institutional investors control a significant amount of all financial assets in the United States. Institutional investors include hedge funds. mutual funds. charitable trusts. they can play a large part in which companies stay solvent.(fund having more than 20 investors with no single investor holding more than 10 per cent of the . They can actively engage in corporate governance. because institutional investors have the freedom to buy and sell shares. nominee company. investment trust. They are registered as FIIs in accordance with Section 2 (f) of the SEBI (FII) Regulations 1995. As such. and exert considerable influence in all markets. Numerous institutional investors act as intermediaries between lenders and borrowers.3INTRODUCTION Definition of 'Foreign Institutional Investor . and which go under. they have a critical importance in the functioning of the financial markets. Foreign Institutional Investor are allowed to subscribe to new securities or trade in already issued securities. Provided that a domestic asset management company or domestic portfolio manager who manages funds raised or collected or brought from outside India for investment in India on behalf of a sub-account. insurance companies. and invest those funds in a variety of different financial instruments and asset classes. bank. and providing them with capital are all part of the job of investment management.FII' “An investor or investment fund that is from or registered in a country outside of the one in which it is currently investing. Their greater ability to monitor corporate behavior as well to select investor‟s profiles implies that they help diminish agency costs. Entities covered by the term „FII‟ include “Overseas pension funds. they also play a critical role in guaranteeing a sufficient diversification of the investors' portfolios.1. university funds. pension funds and mutual funds. institutional portfolio manager. foundations." Foreign Investment refers to investments made by residents of a country in financial assets and production process of another country.Institutional investors will have a lot of influence in the management of corporations because they will be entitled to exercise the voting rights in a company. Economies of scale imply that they increase returns on investments and diminish the cost of capital for entrepreneurs.

They can actively engage in corporate governance. The employer gives that person's pension contributions to a fund. retirement or pension funds. International institutional investors must register with Securities & Exchange Board of India (SEBI) to participate in the market. The term is used most commonly in India to refer to outside companies investing in the financial markets of India. and which go under. an ordinary person will have a pension from his employer. hedge funds. and providing them with capital are all part of the job of investment management. Typical investors include banks. insurance companies. they can play a large part in which companies stay solvent. One of the major market regulations pertaining to FII involves placing limits on FII ownership in Indian companies. Funds are useful because they will hold a broad portfolio of investments in many companies. investment advisors and mutual funds. They actually evaluate the shares and deposits in a portfolio.shares or units of the fund)” (GOI (2005). Institutional investors will have a lot of influence in the management of corporations because they will be entitled to exercise the voting rights in a company. This spreads risk. so if one company fails. For instance. Furthermore. because institutional investors have the freedom to buy and sell shares. These client accounts that the FII manages are known as „sub-accounts‟. or some other financial product. . it will be only a small part of the whole fund's investment.FIIs can invest their own funds as well as invest on behalf of their overseas clients registered as such with SEBI. The fund will buy shares in a company. Influencing the conduct of listed companies. Their role in the economy is to act as highly specialized investors on behalf of others.

yet at the time the practice of private evergetism (which dates to. waterworks. . part of the city's entertainment was financed by the revenue generated by shops and baking-ovens originally offered by a wealthy benefactor. The legal principle of juristic person might have appeared with the rise of monasteries in the early centuries of Christianity. In some African colonies in particular. In the South of Gaul. aqueducts were sometimes financed in a similar fashion. welfare and even the construction of monuments. The concept then might have been adopted by the emerging Islamic law.1. at least. the 4th century BC in Greece) sometimes led to the creation of revenues-producing capital which may be interpreted as an early form of charitable institution.Alongside some Christian monasteries the waqfs created in the 10th century AD are amongst the longest standing charities in the world (see for instance the Imam Reza shrine).4HISTORY OF FOREIGN INSTITUTIONAL INVESTOR Ancient Rome and medieval Islam Roman law ignored the concept of juristic person. The waqf (charitable institution) became a cornerstone of the financing of education.

This has become one of the main channels of FII in India for foreigners.Pre-industrial Europe: Following the spread of monasteries. In the 18th century. . by 1950. Initially. in order to attract more investors. they commonly possessed 10 to 30% of a given region arable land. they owned only 7% of US equities and certainly even less in other countries. yet despite some success stories. ARTER 1991 India opened its stock market to foreign investors in September 1992. donating sometimes large sums of money to institutions became a common practice in medieval Western Europe. • Simplified registration norms. Following the collapse of the agrarian revenues. over the centuries those institutions acquired sizable estates and large fortunes in bullion. SEBI has simplified many terms such as:• The ceiling for overall investment of FII was increased 24% of the paid up capital of Indian company. • Allowed foreign individuals and hedge funds to directly register as FII. they failed to attract a large share of the public's savings and. many of these institution moved away from rural real estate to concentrate on bonds emitted by the local sovereign (the shift dates back to the 15th century for Venice. there were terms and conditions which restricted many FIIs to invest in India. Before 1980 Following several waves of dissolution (mostly during the Reformation and the Revolutionary period) the weight of the traditional charities in the economy collapsed. insurance companies). and in 1993. • Investment in government securities was increased to US$5 billion. and the 17th century for France and the Dutch Republic. In the process. private investors pool their resources to pursue lottery tickets and tontine shares allowing them to spread risk and become some of the earliest speculative institutions known in the West. for instance. But in the course of time. institutions solely owned 2% of the arable land in England and Wales. The importance of lay and religious institutional ownership in the pre-industrial European economy cannot be overstated. New types of institutions emerged (banks. received portfolio investment from foreigners in the form of foreign institutional investment in equities. houses and other hospitals. by 1800.

. the open-end fund. In the United States.g. Mutual funds have both advantages and disadvantages compared to direct investing in individual securities. or trust. They have a long history in the United States. colleges. Open-end funds are most common.S. They are sometimes referred to as "investment companies" or "registered investment companies. and foundations.1TYPES OF INSTITUTIONAL INVESTOR Institutional investors include public and private pension funds. private schools). see articles on specific types of funds including open-ended investment companies." meaning investors can buy or sell shares of the fund at any time. The term mutual fund is less widely used outside of the United States and Canada.. savings institutions. There are 3 types of U. with the principal to remain intact in perpetuity or for a defined time period.[1] While there is no legal definition of the term "mutual fund". most notably in retirement planning.and open-end investment companies. overseen by a board of directors (or board of trustees if organized as a trust rather than a corporation or partnership) and managed by a registered investment adviser. ENDOWMENT FUND A financial endowment is a transfer of money and/or property donated to an institution. Internal Revenue Code. Mutual funds are not taxed on their income and profits if they comply with certain requirements under the U. cultural institutions (e. This allows for the donation to have an impact over a longer period of time than if it were spent all at once. MUTUAL FUND A mutual fund is a type of professionally managed collective investment vehicle that pools money from many investors to purchase securities. museums. universities. Among the institutions that commonly manage an endowment are academic institutions (e. In some circumstances an endowment may be required to be spent in a certain way or alternatively invested.2. unit investment trust. An endowment may come with stipulations regarding its usage. mutual funds must be registered with the Securities and Exchange Commission. insurance companies. libraries. mutual funds: open-end. which are usually referred to by their acronym UCITS. theaters. SICAVs. . Exchange-traded funds (or "ETFs" for short) are open-end funds or unit investment trusts that trade on an exchange.unit trusts and Undertakings for Collective Investment in Transferable Securities. hospitals).g. it is most commonly applied only to those collective investment vehicles that are regulated and sold to the general public. but exchangetraded funds have been gaining in popularity. The most common type." Most mutual funds are "open-ended. must be willing to buy back shares from investors every business day. Today they play an important role in household finances. private foundation. closed. Hedge funds are not considered a type of mutual fund. and religious establishments.S. unitized insurance funds. and closed-end. For collective investment vehicles outside of the United States. The total value of an institution's investments is often referred to as the institution's endowment and is typically organized as a public charity.

or scheme which provides retirement income. or private equity. A single mutual fund may give investors a choice of different combinations of expenses (which may include sales commissions or loads) by offering several different types of share classes. A hedge fund's value is calculated as a share of the fund's net asset value.25 percent. .Mutual funds are generally classified by their principal investments. stock or equity funds and hybrid funds.[2] qualified purchasers) and also limit the total number of investors allowed in the fund.[2] U. limit hedge fund participation to certain classes of investors (see accredited investors. Regulations passed in the United States and Europe after the 2008 credit crisis were intended to increase government oversight of hedge funds and eliminate certain regulatory gaps.S.insurance companies. in the year ended March 31. the largest for any category of investor ahead of mutual funds. hedge funds are subject to the regulatory restrictions of their respective countries. The largest 300 pension funds collectively hold about $6 trillion in assets. PENSION FUND A pension fund is any plan.[1]Hedge funds tend to invest in a diverse range of markets. Funds may also be categorized as index or actively managed.[1] In January 2008. often structured as a limited partnership. 2011 GPIF was still the world's largest public pension fund which oversees 114 trillion Yen ($1. Hedge funds are often open-ended and allow additions or withdrawals by their investors. sovereign wealth funds. for example. currency reserves. that invests private capital speculatively to maximize capital appreciation. bond or fixed income funds. Though they are privately owned and operated. There is controversy about the level of these expenses. meaning that increases and decreases in the value of the fund's investment assets (and fund expenses) are directly reflected in the amount an investor can later withdraw. regulations. They are especially important to the stock market where large institutional investors dominate. The four main categories of funds are money market funds. The Economist reported that Morgan Stanley estimates that pension funds worldwide hold over US$20 trillion in assets. hedge funds. investment instruments. today the term "hedge fund" refers more to the structure of the investment vehicle than the investment techniques. Investors in a mutual fund pay the fund‟s expenses.5 trillion). and strategies. the funds and their managers have historically been exempt from some of the regulation that governs other funds and investment managers with regard to how the fund may be structured and how strategies and techniques are employed. which reduce the fund's returns/performance. HEDGE FUND A hedge fund is a collective investment scheme. fund.[2] Although the (Japan) Government Pension Investment Fund (GPIF) lost 0. Pension funds are important to shareholders of listed and private companies. Because hedge funds are not sold to the general public or retail investors.

life insurance companies. From 1933 (Glass– Steag all Act) until 1999 (Gramm–Leach–Bliley Act). It is a form of risk management primarily used to hedge against the risk of a contingent. . INVESTMENT BANKING An investment bank is a financial institution that assists individuals. underwriting. has evolved as a discrete field of study and practice.e. and commodities). or insurance carrier. is the person or entity buying the insurance policy. Risk management. An advisor who provides investment banking services in the United States must be a licensed broker-dealer and subject to Securities & Exchange Commission (SEC) and Financial Industry Regulatory Authority (FINRA) regulation. while buy side is a term used to refer to advising institutions concerned with buying investment services. research. trading of derivatives and equity securities. facilitating transactions. The transaction involves the insured assuming a guaranteed and known relatively small loss in the form of payment to the insurer in exchange for the insurer's promise to compensate (indemnify) the insured in the case of a financial (personal) loss. investment banks do not take deposits. etc. The insured receives a contract. including G8 countries. uncertain loss. Volcker Rule asserts full institutional separation of investment banking services from commercial banking. or policyholder. Unlike commercial banks and retail banks. the United States maintained a separation between investment banking and commercial banks. Other industrialized countries. and FICC services (fixed income instruments. mutual funds. Trading securities for cash or for other securities (i. from one entity to another in exchange for payment. As part of the Dodd-Frank Act 2010. the insured. market-making). while the public areas such as stock analysis deal with public information. The amount of money to be charged for a certain amount of insurance coverage is called the premium. An investment bank may also assist companies involved in mergers and acquisitions and provide ancillary services such as market making. Private equity funds.INSURANCE COMPANIES Insurance is the equitable transfer of the risk of a loss. corporations.e. currencies. and hedge funds are the most common types of buy side entities.) is the "sell side". or the promotion of securities (i. An insurer. unit trusts. which details the conditions and circumstances under which the insured will be financially compensated. is a company selling the insurance. There are two main lines of business in investment banking. the practice of appraising and controlling risk. An investment bank can also be split into private and public functions with an information barrier which separates the two to prevent information from crossing. called the insurance policy. and governments in raising capital by underwriting and/or acting as the client's agent in the issuance of securities. have historically not maintained such a separation. The private areas of the bank deal with private insider information that may not be publicly disclosed.

pound. SOVEREIGN WEALTH FUND A sovereign wealth fund (SWF) is a state-owned investment fund composed of financial assets such as stocks. These are assets of the sovereign nations that are typically held in domestic and (such as the dollar. with foreign exchange reserves serving short-term "currency stabilization". state pension funds. this type of fund is usually of major economic and fiscal importance. Some sovereign wealth funds may be held by a central bank. property. and liquidity management. or derivatives of differing ilk (even if fairly safe ones. like overnight interest rate swaps) . or may represent. and that may not have a significant role in fiscal management. which accumulates the funds in the course of its management of a nation's banking system. given that (according to law) an investment "trust" is not in fact a "trust" in the legal sense at all. There have been attempts to distinguish funds held by sovereign entities from foreign-exchange reserves held by central banks. Sovereign wealth funds can be characterized as maximizing long-term return. bonds. Sovereign wealth funds invest globally. or other financial instruments. gold. among others.INVESTMENT TRUST An investment trust is a form of collective investment found mostly in the United Kingdom. Some central banks have even begun buying equities. but a separate legal person or a company. precious metals. or sovereign oil funds. Most SWFs are funded by foreign exchange assets. though almost no data is publicly available to back up this assertion. The accumulated funds may have their origin in. or other industrial and financial holdings. and yen). Moreover it is widely believed most have diversified hugely into assets other than short-term. This matters for the fiduciary duties owed by the trustees and the equitable ownership of the fund's assets. Other sovereign wealth funds are simply the state savings that are invested by various entities for the purposes of investment return. Many central banks in recent years possess reserves massively in excess of needs for liquidity or foreign exchange management. highly liquid monetary ones. Investment trusts are closed-end funds and are constituted as public limited companies. euro. Such investment management entities may be set up as official investment companies. The name is somewhat misleading. special drawing rights (SDRs) and International Monetary Fund (IMF) reserve positions held by central banks and monetary authorities. oil funds. along with other national assets such as pension investments. foreign currency deposits.

financial soundness. including their applicable eligibility norms. 3. 1995 INIDICATIVE EVALUATION PARAMETERS ADOPTED BY SEBI BEFORE GRANTING “CERTIFICATEOF REGISTRATION”AS FII: 1. 4. Applicant‟s track record. are regulated by the Securities and Exchange Board of India (Foreign Institutional Investors) Regulations. Whether the applicant is registered with. after the expiry of which. 2008 Application Procedure: Applicants intending to seek registration with SEBI as FIIs are required to file an application in Form A Application Fee: Draft of US$ 10. Criteria specified in Schedule II of the Securities and Exchange Board of India (Intermediaries) Regulations. an appropriate Foreign Regulatory Authority. professional competence. registration requirements and permissible investment avenues and limits. Whether the applicant has been granted permission under the provisions of the Foreign Exchange Management Act.000 in favor of „Securities and Exchange Board of India‟ payable in New York (payable at the time of submitting the application for registration) Validity Period: Certificate of Registration granted (by SEBI) to FIIs is valid for a period of 3 years. .2REGULATORY OVERVIEW Agencies Regulate Foreign Institutional Investors (FII) In India    RBI : The apex bank FIPB : Review all foreign investment proposals SEBI : Regulates India‟s capital market APPLICABLE REGULATIONS Foreign Institutional Investors (hereinafter referred to as “FIIs”). 1999 by the Reserve Bank of India for making investments in India as a Foreign Institutional Investor. experience.2. general reputation of fairness and integrity (the applicant should have been in operation for at least one year) 2. Whether the applicant is a fit & proper person. in the same capacity in which the application is filed with SEBI. and regulated by. an application for renewal of Registration must be made by the FII.

Units of mutual funds. Total holdings of all FIIs put together shall not exceed 24 percent of the paid‐up capital or paid‐up value of each series of convertible debentures. INVESTMENTOPPORTUNITIES 1. grant a certificate in Form B. Total shareholding of each FII under this Scheme shall not exceed 10 per cent Of the total paid up capital or 10 per cent of the paid up value of each series of convertible debentures issued by the Indian company. Investment limits on equity investments by FIIs  Foreign Institutional Investors (FIIs) registered with SEBI and Non‐resident Indians (NRIs) are eligible to purchase shares and convertible debentures issued by Indian companies under the Portfolio Investment Scheme (PIS). other debt instruments. for allocation of the above‐mentioned overall limits and the time period within which allocated limits should be utilized by FIIs. This limit of 24 per cent can be increased to the sectoral cap / statutory limit. the Board shall. Investment limits on debt investments by FIIs:   Cumulative FII investments limit in Government debt –US$ 5 billion Cumulative FII investments limit in Corporate debt –US$ 15 billion Specific methodologies. unlisted.   3. and all Particulars sought have been furnished) and provided that the applicant is found to be eligible for the grant of certificate. debentures and warrants of companies. Derivatives traded on a recognized stock exchange. as applicable to the Indian company. as soon as possible but not later than three months after information called for by it is furnished (if satisfied that the application is complete in all respects. have been laid down by SEBI and are periodically updated through Circulars and Notificati . subject to payment of fees in accordance with the Second Schedule I. listed or to be listed on a recognized stock exchange in India. Commercial papers. Dated Government Securities. Financial instruments available for FII investments:       Securities in primary and secondary markets including shares.GRANT OF CERTIFICATE: Where an application is made for grant of certificate under these regulations. Security Receipts 2.

mutual funds. pension funds. Foreign Institutional Investment (FII) is also flowing into India. Qualified foreign entities (other than those predominantly owned by non resident Indians) seeking to undertake portfolio investments in India are regarded as Foreign Institutional Investors (FIIs).3ADVANTAGES AND DISADVANTAGES ADVANTAGES     Increases Forex reserves Increases domestic savings Increases domestic investments Availability of capital reserve In addition to FDI. These advantages may have eroded over the years as information has become more transparent and accessible. Managing uncertainty and controlling risks.2. and regulation has limited the amount and method of disclosure by public companies. Improving capital markets. Institutional investors are generally considered to be more proficient at investing due to the assumed professional nature of operations and greater access to companies and managements because of size. banks. nominee companies. but also improves the alignment of asset prices to fundamentals. investment trusts. Also. Eligible institutional investors that can register as FIIs include asset management companies. charitable trusts and charitable societies. FIIs as professional bodies of asset managers and financial analysts enhance competition and efficiency of financial markets. incorporated/institutional portfolio managers.      . Equity market development aids economic development. university funds. it not only enhances competition in financial markets. endowment foundations. power of attorney holders. Enhanced flow of equity capital helps improve capital structures and contributes towards building the investment gap. FII inflows help in financial innovation and development of hedging instruments.   Enhanced flows of equity capital FIIs have a greater appetite for equity than debt in their asset structure. The opening up the economy to FIIs has been in line with the accepted preference for non-debt creating foreign inflows over foreign debt.

Overseas investments can improve economic health. who. by contributing to better understanding of firms‟ operations. If the cap on FII is high then they can bring in huge amounts of funds in the coun try‟s stock markets and thus have great influence on the way the stock markets behaves. By increasing the availability of riskier long term capital for projects. and the RBI pumps the amount of Rupee in the market as a result of demand created. institutionalization increases dividend payouts. A foreign institutional investor can play a role in everything from trade negotiations to securing funding for government programs. You can visit the link below to see the Foreign Institutional Investors List   Problems of Inflation: Huge amounts of FII fund inflow into the country creates a lot of demand for rupee. FIIs constitute professional bodies of asset managers and financial analysts.  DISADVANTAGES     Problem of inflation False representation of economy Problem for small investors Hot Money FII investment is frequently referred to as hot money for the reason that it can leave the country at the same speed at which it comes in. Bad corporate governance makes equity finance a costly option. Also. Problems for small investor: The FIIs profit from investing in emerging financial stock markets. Improved corporate governance. The FII buying pushes the stocks up and their selling shows the stock market the . and enhances productivity growth. increase liquidity. to avoid situations where domestic companies end up being owned primarily by foreign investors.” and qualification may be needed to access many types of investments.    Working with a foreign institutional investor can also have benefits for the economy in the nation where the company is active. improve corporate governance. This can help nations address problems like indebtedness while also promoting international cooperation and establishing potentially profitable business partnerships overseas. A foreign institutional investor may be required to register and to demonstrate that it is a legitimate operation. Once registered. going up or down. and provide more opportunities for economic growth. and increasing firms‟ incentives to provide more information about their operations. FIIs can help in the process of economic development. it may be referred to as “qualified. Some nations have put limits in place that are designed to protect their economies. Nations may also put limits on the percentage of foreign ownership that any given company can have.

The first category will consist of government securities of USD 25 billion which merges USD 10 billion for investment limit in short-term government papers. multilateral agencies.7 per cent in October-December period of 2012-13. while the exchange rate for the country losing the money weakens. The second category is for the corporate debt with a limit of USD 51 billion. the banking institution will experience a shortage of funds. If money is withdrawn on short notice.  . and USD 15 billion for long-term government papers. high interest rate investment opportunities. 2013.touched a record high of 6. the exchange rate for the country gaining the money strengthens. However. This creates problems for the small retail investor.the difference between inflow and outflow of foreign currency-. In case of investment in G-secs category. These investors scan the market for short-term.downward path. “Hot money” can have economic and financial repercussions on countries and banks. investors may invest in commercial papers only upto USD 3." it said. the current SEBI auction mechanism allocating debt limits for corporate bonds will be replaced by the 'on tap system' currently in place for infrastructure bonds. eligible investors may invest in treasury bills only up to USD 5. The eligible investors for these two categories are FIIs. including Treasury Bills. The Current Account Deficit (CAD) can be financed only through foreign inflows. "The above changes will come into effect from April 1. In the other category. and USD 1 billion for QFIs (Qualified Foreign Investors) in non-infrastructure sector. including a sublimit of USD 25 billion each for bonds of infrastructure sector and non-infrastructure sector.5 billion within the limit of USD 25 billion. current account deficit-. Hit by high gold and petrol imports and slowdown in exports. the Non-Resident Indians are not subject to any limit for investment in Government Securities as well as corporate debt. When money is injected into a country. QFIs and Long terms investors registered with SEBI-Sovereign Wealth Funds (SWFs). whose fortunes get driven by the actions of the large FIIs. it said. The Finance Ministry said in a separate statement that these sub-limits have been carved out based on the current holdings of such short term instruments by FIIs and have been provided so that existing investments are not adversely affected. They will continue to be regulated as per existing guidelines. Because of the room created by unifying categories. Finance Minister P Chidambaram had said. Hot Money: “Hot money” refers to funds that are controlled by investors who actively seek short-term returns. pension and insurance and central banks of other countries.5 billion within the limit of USD 51 billion.  Adverse impact on Exports: FII flows leading to appreciation of the currency may lead to the exports industry becoming uncompetitive due to the appreciation of the rupee.

1997. foreign investment is labeled direct investment when the investor buys more than 10 per cent of the investment target. FDI is that category of international investment that reflects the objective of obtaining a lasting interest by a resident entity in one economy in an enterprise resident in another economy. Every transaction is settled through a custodian who is under obligation to report to SEBI and RBI for all transactions on a daily basis. Provisions of SEBI (Substantial Acquisition of Shares and Takeovers) Regulations. Institutional investors on the other hand are specialized financial intermediaries managing savings collectively on behalf of investors. The lasting interest implies the existence of a long-term relationship between the direct investor and the enterprise and a significant degree of influence by the investor in the management of the enterprise. and portfolio investment when the acquired stake is less than 10 per cent. returns. 2000 to invest through SEBI registered FII/domestic fund managers. and maturity of claims. . it was noted that adequate safety nets were in force.FII VERSUS FDI According to the International Monetary Fund‟s Balance of Payments Manual 5. towards specific objectives in terms of risk. especially small investors. it was noted that there was a clear distinction between portfolio investment and FDI. for example. While permitting foreign firms/high net worth individuals in February. According to EU law. The basic presumption is that FII‟s are not interested in management control. To allay fears of management control being exercised by portfolio investors. Monitoring of sectoral caps by RBI on a daily basis.     Transaction of business in securities on the stock exchanges are only through stock brokers who have been granted a certificate by SEBI.

796 6.267 -717 9.844 * As on March 31.796 6.Financial Year INR crores Financial Year 1992-93 1993-94 1994-95 1995-96 1996-97 1997-98 1998-99 1999-00 2000-01 2001-02 2002-03 2003-04 2004-05 2005-06 2006-07 2007-08 2008-09 2009-10 2010-11 2011-12 2012-13* Total Equity 13 5.658 146.207 8.127 4.605 12.438 36.367 796.467 168.958 -1.738 Debt 0 0 0 0 29 691 -867 453 -273 690 162 5.689 45.4FII INVESTMENT IN INDIA FII Investment .706 110.121 43.811 142.765 45.122 9.801 25.236 53.377 28.317 49.960 44.763 2.670 10.546 5.881 41.334 5.072 2.467 30.127 4.942 8.584 10.221 110.575 5.033 628.179 -45. 2013 .123 48.2.775 1.759 -7.805 1.840 66.527 39.726 140.895 32.942 8.404 -47.933 8.438 93.988 Total 13 5.334 168.

9 19261.1 19884 19215.4 Total 26328.7 292.5 127736.9 1792.5 11364 9577.1 1704.8 3391.6 -3787.6 3222 1180.5 -4896.5 13664.3 26792.8 -6588.2 Debt 15971.7 10803.4 34989.2 622.FII INVESTMENT DETAIL ( CALENDAR YEAR ) Monthly FII Net Investment INR crores Month Jan-12 Feb-12 Mar-12 Apr-12 May-12 Jun-12 Jul-12 Aug-12 Sep-12 Oct-12 Nov-12 Dec-12 Total .9 35227.5 7851.4 11069.1 -501.1 8381.2 10015.1 1681.2 24463.2 163350.5 3569.2012* Equity 10357.3 10272.1 -347.9 9869.7 265.1 .1 -1109.7 25212.

669 Amount left after auction 0 (INR Cr.2 0.) Total amount (INR Cr.283.398 23.232 Cr.919 36.) allocated 1.955.38 16.) Total amount bid for (INR 2.110 0.669 Total Available Limit (INR 1.984 78.5 2 2.294 34.173 .447.925 66.845. 2013 Particulars Govt Debt Govt Debt Corp Debt Old Corp Debt TOTAL Old LT LT 33.866 26.) Percentage allocated 100% 0 0 0 100% 100% 100% Total no. of bids 10 50 22 49 131 Highest bid in bps 1. of successful bids 9 49 21 43 122 Total no.010 5.919 Cr.866 26.925 66.BIDDING DETAIL BIDDING DETAILS – FEBRUARY 20.959 3.1 2 Lowest successful bid in 1 bps Fee Amount (INR) 2.0281 0.667 4.379.177 33.655 47.959 3.

access to cheap global credit. International institutional investors must register with Securities & Exchange Board of India (SEBI) to participate in the market. The data for the study uses the information obtained from the secondary resources like website of BSE sensex. university funds. charitable trusts.(fund having more than 20 investors with no single investor holding more than 10 per cent of the shares or units of the fund)” (GOI (2005)). shall be deemed to be a Foreign Institutional Investor. asset management company. institutional portfolio manager. endowments. • It lowers cost of capital. . Following are the some advantages of FIIs. nominee company. The term is used most commonly in India to refer to outside companies investing in the financial markets of India. mutual funds. They actually evaluate the shares and deposits in a portfolio. In this context present paper examines the contribution of foreign institutional investment in sensitivity index (Sensex)." Foreign Investment refers to investments made by residents of a country in financial assets and production process of another country. foundations. investment Trust .4. Also attempts to understand the behavioral pattern of FII during the period of 2001 to 2010 and examine the volatility of BSE Sensex due to FII. These client accounts that the FII manages are known as „sub-accounts‟. We attempted to explain the impact of foreign institutional investment on stock market and Indian economy.1IMPACT ON STOCK MARKET WITH SPECIAL REFERENCE TO BSE ABSTRACT Foreign institutional investors have gained a significant role in Indian stock markets. One of the major market regulations pertaining to FII involves placing limits on FII ownership in Indian companies. INTRODUCTION FOREIGN INSTITUTIONAL INVESTOR: The term Foreign Institutional Investor is defined by SEBI as under: "Means an institution established or incorporated outside India which proposes to make investment in India in securities. WHY FIIS REQUIRED? FIIs contribute to the foreign exchange inflow as the funds from multilateral finance institutions and FDI (Foreign direct investment) are insufficient. The dawn of 21st century has shown the real dynamism of stock market and the various benchmarking of sensitivity index (Sensex) in terms of its highest peaks and sudden falls. Entities covered by the term „FII‟ include “Overseas pension funds. Also attempts to present the correlation between FII and BSE sensex by the Karl Pearson‟ Coefficient of correlation test. bank. charitable societies etc. FIIs can invest their own funds as well as invest on behalf of their overseas clients registered as such with SEBI. Provided that a domestic asset management company or domestic portfolio manager who manages funds raised or collected or brought from outside India for investment in India on behalf of a sub-account.

INVESTMENTS BY FIIS There are generally two ways to invest for FIIs. • It leads to higher asset prices in the Indian market. Bonds C. received portfolio investment from foreigners in the form of foreign institutional investment in equities. and in 1993. Debentures (Non Convertible Debentures.• It supplements domestic savings and investments. Other Debt Market Instruments It should be noted that foreign companies and individuals are not be eligible to invest through the 100% debt route. • And has also led to considerable amount of reforms in capital market and financial sector. . HISTORY OF FII India opened its stock market to foreign investors in September 1992.70 (Equity Instruments): 30 (Debt Instruments) • 100% DEB 100% investment has to be made in debt securities only EQUITY INVESTMENT ROUTE: In case of Equity route the FIIs can invest in the following instruments: A. • EQUITY INVESTMENT 100% investments could be in equity related instruments or up to 30% could be invested in debt instruments i. Dated government securities D. Units of schemes floated by the Unit Trust of India and other domestic mutual funds. B. C. Partly Convertible Debentures etc. whether listed or not. listed or to be listed on a recognized stock exchange in India. Treasury Bills E. Warrants 100% DEBT ROUTE: In case of Debt Route the FIIs can invest in the following instruments: A. Securities in the primary and secondary market including shares which are unlisted.e.) B.

in order to attract more investors. • Local custodian and designated bank to route its transactions. • Investment in government securities was increased to US$5 billion.“no person shall buy. 1995. to. whether listed on a recognized stock exchange or not. ELIGIBLE SECURITIES A FII can make investments only in the following types of securities: • Securities in the primary and secondary markets including shares. professional competence and financial soundness.be-listed companies or companies listed on a recognized stock exchange. • Permission under the provisions of the Foreign Exchange Management Act. • Government Securities . and units of scheme floated by a Collective Investment Scheme. there were terms and conditions which restricted many FIIs to invest in India. PROCEDURE FOR REGISTRATION: The Procedure for registration of FII has been given by SEBI regulations. SEBI has simplified many terms such as:• The ceiling for overall investment of FII was increased 24% of the paid up capital of Indian company. • Legally permitted to invest in securities outside country or its incorporation/establishment. • Allowed foreign individuals and hedge funds to directly register as FII. Initially. • Simplified registration norms.This has become one of the main channels of FII in India for foreigners. • The applicant must be a „fit and proper‟ person. • Regulated by appropriate foreign regulatory authority in the same capacity/category where registration is sought from SEBI. • Units of schemes floated by domestic mutual funds including Unit Trust of India. the format of which is provided in the SEBI (FII) Regulations. But in the course of time. 1999 (FEMA) from the RBI. It states. sell or otherwise deal in securities as a Foreign Institutional Investor unless he holds a certificate granted by the Board under these regulations”. An application for grant of registration has to be made in Form A. THE ELIGIBILITY CRITERIA FOR APPLICANT SEEKING FII REGISTRATION IS AS FOLLOWS: Good track record. debentures and warrants of unlisted.

Further. • Security receipts REGULATION RELATING TO FII OPERATION • Investment by FIIs is regulated under SEBI (FII) Regulations. foreign individual.• Derivatives traded on a recognized stock exchange – like futures and options. SEBI acts as the nodal point in the entire process of FII registration. • Several new categories of registration viz. • FIIs are required to allocate their investment between equity and debt instruments in the ratio of 70:30. Indian Companies can raise the above mentioned 24% ceiling to the Sectoral Cap / Statutory Ceiling as applicable by passing a resolution by its Board of Directors followed by passing a Special Resolution to that effect by its General Body. • All FIIs and their sub-accounts taken together cannot acquire more than 24% of the paid up capital of an Indian Company. foreign corporate etc. A copy of the application form is sent by SEBI to RBI along with their 'No Objection' so as to enable RBI to grant necessary permission under FEMA. it is also possible for an FII to declare itself a 100% debt FII in which case it can make its entire investment in debt instruments. 2000. lending and borrowing of Indian securities from February 1. 1995 and Regulation 5(2) of FEMA Notification No. • RBI approval under FEMA enables a FII to buy/sell securities on stock exchanges and open foreign currency and Indian Rupee accounts with a designated bank branch. FIIs can now invest in interest rate futures that were launched at the National Stock Exchange (NSE) on 31st August. 2009.20 dated May 3. However. • Registration once granted to foreign investors was made permanent without a need to apply for renewal from to time thereby substantially reducing the administrative burden. were introduced. • FIIs are required to apply to SEBI in a common application form in duplicate. . • Also the application fee for foreign investors applying for registration has recently been reduced by 50% for FIIs and sub accounts Also. these amendments are: • The definition of “broad based fund” under the regulations was substantially widened allowing several more sub accounts and FIIs to register with SEBI. 2008. • Commercial paper. in 2008 amendments were made to attract more foreign investors to register with SEBI. sovereign wealth funds. institutional investors including FIIs and their sub-accounts have been allowed to undertake short-selling.

These impacts made the Indian stock market more attractive to FII & also domestic investors. At the same time there is unease over the volatility in foreign institutional investment flows and its impact on the stock market and the Indian economy.OBJECTIVES • To get the knowledge of stock market. HYPOTHESIS • There is close correlation between BSE Sensex volatility and FIIs. • They played major role in expanding securities business. • To study the behavioral pattern of FII in India during 2000 to 2010. Apart from the impact they create on the market. • Their policy on focusing on fundamentals of share had caused efficient pricing of share. INFLUENCE OF FII ON INDIAN MARKET Positive fundamentals combined with fast growing markets have made India an attractive destination for foreign institutional investors (FIIs). their holdings will influence firm performance. Growth is the only inclination for their investment. This 50% drop is apparently because of concerns about shrinking profit margins and financial performance. the company dropped from a high of around US$30 to the current level of below US$15. The impact of FII is so high that whenever FII tend to withdraw the money from market. Reddy‟s Lab by 7% to less than 18%. the domestic investors fearful and they also withdraw from market. Portfolio investments brought in by FIIs have been the most dynamic source of capital to emerging markets in 1990s. . These instances made analysts to generally claim that foreign portfolio investment has a short term investment horizon. Some major impact of FII on stock market: • They increased depth and breadth of the market. when foreign institutional investors reduced their holdings in Dr. • To find out the relationship between the FIIs investment and stock market. • To know the volatility of BSE Sensex due to FIIs. For instance.

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we can see that there is increase in net investment till 2005-06 and there was a small decrease in investment in the year 2006-07 and then again increase in 2007-08 and again decrease in 200809.NET INVESTMENT OF FII Now we analyze the net investment graph from 2000-01 till Nov30. This was the best period on Indian stock market where stock prices were increased and the market was in good mood. But there was a steep increase in the year 2009-10.2010-11. From this.2011. .

employment and income of the host country. pension fund in the United Kingdom and United States had 68 per cent respectively of their portfolios in equity in1998. dematerialization and regulations on reporting and disclosure standards were initiated because of the presence of FIIs.The impact of FII is so high that whenever FII tend to withdraw the money from market. who.takeover or market control via equity. Bad corporate governance makes equity finance a costly option. and direct control via debt or relationship banking-the third model. A. FIIs constitute professional bodies of asset managers and financial analysts. By increasing the availability of riskier long term capital for projects. are known to have contributed to the development of zerocoupon bonds and index futures. Incentives for shareholders to monitor firms and enforce their legal rights are limited and individuals with small share-holdings often do not address the issue since others can freeride on their endeavor. MANAGING UNCERTAINTY AND CONTROLING RISKS: FIIs promote financial innovation and development of hedging instruments. The market reforms were initiated because of the presence of them and this in turn has led to increased flow. direct control via equity. ensuring the rights of shareholders is a problem that needs to be addressed efficiently in any economy.4. Among the four models of corporate control .2EFFECTS OF FII ON INDIAN ECONOMY Let us study the positive and negative impacts of this rise of investments by FIIs: POSITIVE IMPACT: It has imphasized upon the fact that the stock market reforms like improved market transparency. thedomestic investors fearful and they also withdraw from market. IMPROVING CAPITAL MARKETS: FIIs as professional bodies of asset managers and financial analysts enhance competition and efficiency of financial markets. B. the FIIs can help in the process of economic development. For example. These because of their interest in hedging risks. leveraged control or market control via debt. C. automation. Not only it can help in supplementing for domestic saving for the purpose of development project like building economic and social infrastructure but can also help in growth of rate of investment. ENHANCED FLOWS OF EQUITY CAPITAL: FIIs are well known for greater appetite for equity than debt in their asset structure. Information asymmetries and incomplete contracts between share-holders and management are at the root of the agency costs. But FIIs flows can be considered both as the cause and the effect of stock market reforms. and increasing firms‟ incentives to supply more information about them. With boards often captured by managers or passive. which is known as corporate governance . IMPROVED CORPORATE GOVERNANCE: Good corporate governance is essential to overcome the principal-agent problem between share-holders and management. by contributing to better understanding of firms‟ operations. improve corporate governance. These impacts made the Indian stock market more attractive to FII & also domestic investors. D. it boosts the production.

This situation leads to excess liquidity thereby leading to inflation where too much money chases too few goods. D. C. FII investment is frequently referred to as hot money for the reason that it can leave the country at the same speed at which it comes in. has institutional investors at its core. statutory agencies like SEBI have prescribed norms to register FIIs and also to regulate such investments flowing in through FIIs. the exchange rate for the country gaining the money strengthens. ADVERSE IMPACT ON EXPORTS: FII flows leading to appreciation of the currency may lead to the exports industry becoming uncompetitive due to the appreciation of the rupee. B. This creates problems for the small retail investor. The term FII is used most commonly in India to refer to outside companies investing in the financial markets of India. board representation is supplemented by direct contacts by institutional investors. If the cap on FII is high then they can bring in huge amounts of funds in the country‟s stock markets and thus have great influence on the way the stock markets behaves. The FII buying pushes the stocks up and their selling shows the stock market the downward path. In country like India. high interest rate investment opportunities. INFLATION: Huge amounts of FII fund inflow into the country creates a lot of demand for rupee. And this dependence has to a great extent caused a lot of trouble for the Indian economy. PROBLEM TO SMALL INVESTORS: The FIIs profit from investing in emerging financial stock markets. When money is injected into a country. . NEGATIVE IMPACT: If we see the market trends of past few recent years it is quite evident that Indian equity markets have become slaves of FIIs inflow and are dancing to their tune. the banking institution will experience a shortage of funds. POTENTIAL CAPITAL OUTFLOWS: “Hot money” refers to funds that are controlled by investors who actively seek short-term returns. and the RBI pumps the amount of Rupee in the market as a result of demand created. BSE SENSEX AND FII INVESTMENT CORRELATION Sensex is the commonly used name for the Bombay Stock Exchange Sensitive Index – an index Composed of 30 of the largest and most actively traded stocks on the Bombay Stock Exchange (BSE). while the exchange rate for the country losing the money weakens. Some of the factors are: A. These investors scan the market for short-term.movement. whose fortunes get driven by the actions of the large FIIs. going up or down. If money is withdrawn on short notice. “Hot money” can have economic and financial repercussions on countries and banks. In this third model.

financial performance and stock performance. But given the huge volume of investments. which have enabled a host of economic reforms. there is a possibility of bi-directional relationship between FII and the equity returns. Chakrabartiet al (2003) have found in their research that the equity return has a significant and positive impact on the FII.e. P.REVIEW OF LITRATURE 1. foreign investors could play a role of market makers and book their profits. i. Stanley Morgan (2002) has examined that FIIs have played a very important role in building up India‟s forex reserves. 3. Also examined is the relationship between foreign institutional investment and firm specific characteristics in terms of ownership structure. Among the financial performance variables the . Secondly. they can buy financial assets when the prices are declining thereby jacking-up the asset prices and sell when the asset prices are increasing. Foreign investors choose the companies where family shareholding of promoters is not substantial. Krishna Prasanna (2008) has examined the contribution of foreign institutional investment particularly among companies included in sensitivity index (Sensex) of Bombay Stock Exchange. Research by Morgan Stanley shows that the correlation between foreign inflows and market returns is high during bear and weakens with strengthening equity prices due to increased participation by other players. 2. the correlation between returns and flows reduces during bull markets as other market participants raise their involvement reducing the influence of FIIs. Hence.. However. The Morgan Stanley report notes that FII strongly influence short-term market movements during bear markets. FIIs are now important investors in the country‟s economic growth despite sluggish domestic sentiment. Agarwal. It is observed that foreign investors invested more in companies with a higher volume of shares owned by the general public. The promoters‟ holdings and the foreign investments are inversely related.

A study conducted by the World Bank (1997) reports that stock market liquidity improved in those emerging economies that received higher foreign investments. BLB Shares & Financial Services Ltd BPL Ltd. (Reliance Ind.. Classic Financial Services & Enterprises Ltd. 4. Ashoka Viniyoga Ltd.. Bharat Nidhi Ltd. meaning that there is causality from FII to Sensex. Today. Kumar (2001) inferred that FII investments are more driven by Fundamentals and they do not respond to short-term changes or technical position of the market. Mumbai. November 29. Ashima Syntex Ltd. there is a need to review stock exchanges and improve the liquidity position of various scrips listed on them. regression with Sensex as dependent variable showed that one month lag of NFI is significant.e.share returns and earnings per share are significant factors influencing their investment decision. Amar Investments Ltd. a regression of NFI was estimated on lagged values of the first difference of NFI. LIST OF COMPANIES List of companies which have raised the ceiling from 10% in respect of NRIs investments under PIS (w.f. first difference of Sensex and one lagged value of the error correction term (the residual obtained by estimating the regression between NFI and Sensex). Kumar (2001) investigated the effects of FII inflows on the Indian stock market represented by the Sensex using monthly data from January 1993 to December 1997. 2010) Upto 24% 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 Alembic Chemical Works Co. Ahmedabad. Cifco Finance Ltd.India Jute Mills Co. Burr Brown (India) Ltd Camac Commercial Company Ltd. CPPL Ltd.. Similarly. In testing whether Net FII Investment (NFI) has any impact on Sensex. 5. Infrastructure Ltd) Mumbai. Calcutta. Ltd. Ahmedabad. Anglo. Calcutta. adoption of best international practices and introduction of competition. . Gurucharan Singh (2004) highlighted that the securities market in India has come a long way in terms of infrastructure. The study concluded that Sensex causes NFI. Arvind Mills. Ltd. Ceenik Exports (India) Ltd.

B‟lore Essar Steel Ltd. Ferro Alloys Corporation Ltd. CRISIL DCM Ltd.. Dharani Sugars & Chemicals Ltd Dolphin Offshore Enterprises ( I ) Ltd. Tumsar. Gammon India Ltd LIST OF COMPANIES IN WHICH FII INVESTMENT IS ALLOWED UPTO 30% OF THEIR PAID UP CAPITAL UNDER PIS 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 Asian Paints (India) Ltd Capital Trust Ltd Container Corporation of India Divi‟s Laboratories Ltd Ferro Alloys Corporation Ltd Garware Polyester Ltd GIVO Ltd (formerly KB & T Ltd) Mahindra Gesco Developers Ltd Orchid Chemicals and Pharmaceuticals Ltd Penta Soft Tec(Pentafour Communications Ltd) Polyplex Corporation Ltd Ranbaxy Laboratories Ltd Shasun Chemicals Ltd Sonata Software Ltd The Paper Products Ltd Vikas WSP Ltd . Essar Shipping Ltd. DCM Shriram Consolidated Ltd.. Emco Ltd.16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 Crest Communication Ltd. Federal Bank Ltd. Eveready Industries India Ltd. Essar Oil Ltd. Fabworth (I) Ltd.

2012) Radico Khaitan Limited (w. 2013.02.e.f.02.LIST OF COMPANIES IN WHICH FII INVESTMENT IS ALLOWED UPTO 40% OF THEIR Paid Up Capital 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 Adlabs Films Ltd. UTV Software Communications Ltd Visual Soft Technologies Ltd. The India Cements Ltd.(w. 2013. Suven Life Sciences Ltd.f.e. Elbee Services Ltd Glenmark Pharmaceuticals Ltd Gujarat Ambuja Cements Ltd HEG Ltd Hero Honda Motors Ltd Jindal Steel & Power Ltd Jyoti Structures Ltd Maars Software International Ltd Mount Everest Mineral Water Ltd Padmini Technologies Ltd.f.2013) Apollo Tyres Ltd. Aftek Infosys Ltd. Silverline Technologies Ltd. Shanti Gears Ltd. 24. Rajasthan Spinning & Weaving Mills Ltd Rico Auto Industries Ltd. Ways India Ltd.e. updated 30 from earlier limit of 30%) Havells India Ltd (w. April 23. Shemaroo Entertainment Limited (w. The Indian Hotels Company Ltd Thiru Arooran Sugars Ltd. 06. February 14.f. Bharat Forge Ltd Burr Brown (India )Ltd Cipla Ltd. updated from 31 earlier limit of 24%) LIST OF COMPANIES IN WHICH FII INVESTMENT IS ALLOWED UPTO 49% OF THEIR Paid Up Capital 1 Alok Industries . Balaji Telefilms Ltd.e.

22 Mastek Ltd 23 Max India Ltd 24 McDowell & Co Ltd 25 NIIT Ltd. 11 Financial Technologies (I) Ltd 12 HDFC Bank Ltd 13 Himachal Futuristic Communications Ltd. 26 NIIT Technologies Ltd. 19 LIC Housing Finance Ltd. 15 Hughes Software Ltd. 18 Karnataka Bank Ltd. 20 Marksans Pharma Ltd. 21 Mahindra & Mahindra Ltd. S. Kulkarni Developers Ltd. Reddy‟s Laboratories Ltd. 10 Federal Bank Ltd. 14 Hindustan Lever Ltd. 8 Dr. 16 ICICI Bank Ltd. 17 Ind-Swift Laboratories Ltd.2 Auribindo Pharma Ltd. . 3 Arvind Mills Ltd 4 Balakrishna Industries Ltd 5 Blue Dart Express Ltd 6 CRISIL 7 Digital GlobalSoft Ltd. 9 D.

e.(100%) Dynamatic Technologies Limited .f.21. – (100%) Hexaware Technologies Ltd – (100%) Housing Development and Infrastructure Limited – (100%) Indiabulls Real Estate Limited –(100%) Indiabulls Financial Services Ltd – (100%) Indiabulls Securities Limited . 28 Reliance Capital Ltd.27 Panacea Biotec Ltd.2013) Educomp Solutions Limited. – (100%) Mphasis BFL Ltd – (100%) .06. 33 Sadbhav Engineering Limited 34 S. – (100%) IVRCL Infrastructures & Projects Ltd (100%) India Infoline Ltd. 29 Reliance Energy Ltd.(100%) Geodesic Information Systems Ltd.(100%) Indiabulls Power Limited (100%) 14 (formerly Sophia Power Company Limited) 15 16 17 18 19 20 Infotech Enterprises Limited (100%) Infosys Technologies Ltd.(100%) Geometric Software Solutions Ltd – (100%) Gujarat NRE Coke Limited -(74%) HCL Infosystems Ltd. 30 Reliance Industries Ltd. –(100%) Gateway Distriparks Ltd . Kumars Nationwide Ltd 35 Soffia Software Ltd LIST OF COMPANIES IN WHICH FII INVESTMENT IS ALLOWED UPTO SECTORAL CAP/STATUTORY CEILING OF THEIR PAID UP CAPITAL 1 2 3 4 5 6 7 8 9 10 11 12 13 AZTEC Software and Technology Services Ltd .(26%) (w. (100%) Mascon Global Ltd. 32 SB & T International Ltd. 31 Reliance Petroleum Ltd.

f. 2 Elpro International Limited (wef 25.2011) 3 Voltamp Transformers Limited(wef 26-09-2012) 4 Pantaloon Retail (India) Limited( wef 23-1-2013) 5 City Union Bank Ltd (w.(100%) LIST OF PRINT MEDIA COMPANIES IN WHICH FDI / FII INVESTMENT IS ALLOWED 1 Jagran Prakashan -26% 2 Deccan Chronicle Holdings Ltd – 24% (FIIs upto 14%) 3 IBN 18 Broadcast Ltd.-26% Companies in which overall FII ceiling has reached and no further purchases are allowed Companies falling under 24 % 1 Panyam Cements and Minerals Industries Ltd.21 Orbit Corporation Limited (100%) 22 23 24 25 26 27 Pentamedia Graphics Ltd.(100%) Pentasoft Technologies Ltd. (74%) Reliance Communications Ltd – (74%) 28 Sujana Metal Products Ltd .(100%) 29 Sujana Towers Limited-(100%) 30 Sujana Universal Industries Ltd . – (100%) Prajay Engineers Syndicate Limited – (100%) Punj Lioyd Limited (100%) IFCI Limited. .03.01.e.2013) Companies falling under 30 % None Companies falling under 49% limit None Companies where 38% FII limit has been reached and further purchases are allowed with prior approval of RBI.08..

2013) Companies where NRI/PIO Investment has already reached 10 % and no further purchases can be allowed 1 Chandraprabhu Housing Ltd 2 Coxswain Technology Ltd (Kaveri Biotech Ltd) 3 Dev Sugars Ltd 4 Dharendra Industries Ltd 5 DSQ Biotech Ltd 6 Fintech Communications 7 IQMS Software Ltd 8 Kakatiya Cement Sugar & Industries Ltd 9 10 11 12 13 Madras Aluminium Co. None Companies where 22% FII limit has been reached and further purchases will be allowed with prior approval of RBI 1 Grasim Industries Limited GSS Infotech Limited (GSS America Infotech Limited) (w.f.e.None Companies where 28% FII limit has been reached and further purchases are allowed with prior approval of RBI. 29-05-2013) 5 Pennar Industries Limited (w.07. Ltd. 14 14.11.e.04.2013) 4 Carborundum Universal Limited (w.e.e.30. e. 17-0915 2012) Companies where the NRI investment has reached the trigger point of 8% and further purchases are allowed only with prior permission of RBI 1 Codura Exports Ltd 2 Cosmo Films Ltd . f. SGN Telecom SPL Ltd.f. f. 25-92 2012) 3 CMC Ltd (w. e.03. Goldcrest Finance (India) Limited (w. Squared Biotech Ltd Tai Industries Ltd.f.f.2011) Khodiyar Industries Limited ( w.

e.2013) 11 Selan Exploration Technology Limited( w. None Public Sector banks in which 18% caution limit has been reached and further purchases by FIIs/NRIs/PIOs are allowed only with prior permission of RBI 1 Punjab National Bank . 6 Nexus Software Ltd 7 8 9 10 Polyplex Corporation Ltd Premier Explosives Ltd Teledata Technology Solutions Limited (w.e.03.f.2013) Teledata Informatics Limited (Name changed to: Agnite Education Limited but not incorporated in BSE site) (w.05. None Print Media Companies in which the Caution limit in respect of maximum permissible foreign holding including FDI/NRI/PIO/FII Investments as stipulated by Government has reached.f.e.f. 1 Dynamatic Technologies Limited (w.e.03.f. 21-062013) Companies in which the Caution limit in respect of maximum permissible foreign holding including GDR/ADR/FDI/NRI/PIO/FII Investments as stipulated by Government has reached.05. None Print Media Companies in which the Ban limit in respect of maximum permissible foreign holding including FDI/NRI/PIO/FII Investments as stipulated by Government has reached.14-06-2013) Companies in which the Ban limit in respect of maximum permissible foreign holding including GDR/ADR/FDI/NRI/PIO/FII Investment as stipulated by Government has been reached.3 Dalmia Cement (Bharat) Ltd 4 Deccan Cements Ltd 5 Garden Silk Mills Ltd.

f. 14.e.2013) POPULAR ARTICLES ABOUT INSTITUTIONAL INVESTORS 1)Axis Bank surges over 5% as RBI lifts FII buying restriction ECONOMICTIMES. 09.49AM IST Tags:       RBI| FII buying| FII| Axis Bank Ltd.f.08.COM Sep 10. 2013. 06-06-2013) Private Sector Banks in which the Ban limit in respect of maximum permissible foreign holding including GDR/ADR/FDI/NRI/PIO/FII Investments as stipulated by Government has reached 1 Axis Bank Ltd (w.Private Sector Banks in which the Caution limit in respect of maximum permissible foreign holding including GDR/ADR/FDI/NRI/PIO/FII Investments as stipulated by Government has reached 1 ING Vysya Bank Limited (w.| Axis Bank .e.

m. The RBI on September 04. At 09:25 a.002. on the BSE.COM SEP 6. the stock was at Rs 1.56PM IST Tags:          Tata Power| stock market| Sensex| SBI| Rupee| NSE| nifty| L&T| Jindal Steel| . (The central bank has withdrawn…) MUMBAI: Axis Bank was witnessing buying action from institutional investors after the Reserve Bank of India allowed them to increase their holding in the stock. The central bank has withdrawn the restrictions placed on the purchase of shares of the bank with immediate effect. up 5. 12.85 and a low of Rs 977 in early trade. RUPEE BELOW 66/$ ECONOMICTIMES.013. 2013 notified that the foreign shareholdings through foreign institutional investors (Flls)/ non resident Indians (NRIs)/persons of Indian origin (PlOs)/foreign direct investment (FDI)/American Depository Receipts (ADRs)/Global Depository Receipts (GDRs) in Axis Bank have gone below the threshold limit stipulated under the extant FDI Policy.12 per cent.25. 2)SENSEX RALLIES OVER 250 POINTS. 2013. It touched a high of Rs 1.

12 per dollar.43 per cent. capital goods and banks.        Indian market| ICICI bank| Hindustan UniLever| Hero MotoCorp| Coal India| Cipla| BSE| Bharti Airtel (The index breached 19..38 in trade today.101.82 crore on Thursday as per the provisional data from the National Stock Exchange. It touched a high of 19. The index breached 19. or 0.32 points or 1. the 30-share index was at 19.41 crore while domestic institutional investors were net sellers worth Rs 492.08. The rupee has strengthened against the greenback as inflow continued in equity markets. up 30 paise.200…) MUMBAI: The S&P BSE Sensex bounced back from day's low as institutional investors resumed to lap up beaten down frontline stocks. against its previous close of 66.m. At 12:52 p. up 258. .249.71.238. The partially convertible rupee was at 65.36 per cent. The foreign institutional investors bought shares worth Rs 1.200 mark on the back of gains in pharmaceuticals.929. The sentiment among institutional investors turned bullish after a strong maiden speech by the new RBI governor Raghuram Rajan.35 and a low of 18.

25 per cent.The Nifty was at 5. It touched a high of 5.34 per cent) and SBI (1.43 per cent. Among the sectoral indices. 3)POWER FINANCE CORP PLANS TO RAISE AT LEAST RS 150 CRORE VIA BONDS REUTERS." the report added. Tata Power (2.550 levels which is a bullish signal and one should maintain a positive bias in the near term for an upside target of 5.21 per cent).51 per cent.150 levels. The S&P BSE Midcap Index was up 0. up 72.62 per cent) and L&T (2. Bharti Airtel (2.37 per cent and the S&P BSE Smallcap Index was up 0. The market breadth was positive on the BSE with 1. Cipla (3.66 per cent). Coal India (2. Jindal Steel (3." said Nirmal Bang report.91 per cent). the S&P BSE Capital Goods Index gained 1.15 in trade today.43 per cent. the S&P BSE Healthcare Index was up 1.650 & 5.45 points or 1.566.720 levels. "Nifty has managed to surpass the resistance of 5.21 per cent) were among the major Sensex gainers. ICICI Bank (4. "Bank Nifty formed a bullish pattern on the daily charts which has confirmed a positive bias.98 per cent).03 per cent.673. 10. The index has managed to hold the crucial support and has bounced sharply from the oversold levels and we expect short term rise to 9. Earlier at 12:20 pm.950 & 10.4. Hero MotoCorp(1.13 per cent).01AM IST Tags:    Power Finance Corp| Crisil ICRA| Care . SEP 10. 2013.05 per cent) were among the top losers.148 gainers against 818 losers.42 per cent and the S&P Bankex advanced 1. Hindustan Unilever (2.80 and a low of 5. The S&P BSE Auto Index was down 0.78 per cent).665.

2013. Power Finance has scheduled the issue opening and closing for Friday. as per the document. NTPC DOWN ECONOMICTIMES. and 20-year bonds at 8. The issue is open to institutional investors and corporates.COM SEP 17.76 billion rupees and is rated AAA by Crisil. SUN PHARMA. as per the document. The firm will issue 10-year tax-free bonds at 8. 15-year bonds at 8. ICRA and Care rating agencies. 02. 4)SENSEX RANGEBOUND.41 percent. The issue has a greenshoe option of 3. according to a termsheet. ONGC.(India's Power Finance Corp…) MUMBAI: India's Power Finance Corp plans to raise at least Rs 150 crore ($23 million) via a private placement of tax-free bonds.04 percent.40 percent.45PM IST Tags:   Wipro| Sun Pharma| .

As the market is facing resistance near the higher end of the trading range.57 points or 0. down 23. some profit booking can't be ruled out if the RBI Governor Raghram Rajan takes hawkish stance.809.42 per cent and the S&P BSE Smallcap Index was 0.635.90. The S&P BSE Midcap Index was down 0.829.718. say analysts. down 11.95 and a low of 5.804. At 02:30 p.20 per cent lower.m.853.05 points or 0. It touched a high of 19. .28 and a low of 19. The Nifty was at 5.19 per cent.12 per cent.90 in trade today.44 in trade today.            stocks| Sensex| Rupee| RBI| NTPC| NSE| nifty| markets| L&T| HDFC| Fed| BSE (Sensex continued to move…) MUMBAI: The S&P BSE Sensex continued to move in a narrow range as investors chose to stay on sidelines ahead of the US Fed and the RBI policy meet..50. the 30-share index was at 19. It touched a high of 5.

83 per cent higher and the S&P BSE Auto Index gained 0.87 crore while domestic institutional investors were net sellers worth Rs 425. the S&P BSE Metal Index was 0. .82 per cent). the S&P BSE Bankex was 1.30 per cent).33 per cent.76 per cent) and L&T (1. Dr Reddy's Laboratories (3. Wipro (4. the S&P BSE IT Index was up 1. Sesa Goa (2.06 per cent) and TCS (1. Foreign institutional investors(FIIs) bought shares worth Rs 282. NTPC (2. HDFC (1.11 per cent lower and the S&P BSE Capital Goods Index slipped 1.17 crore on Monday as per the provisional data from the National Stock Exchange.09 per cent.37 per cent) were among the top Sensex losers.88 per cent). ONGC (2. The S&P BSE Power Index was down 1.83 per cent.81 per cent). Sun Pharma (3.231 losers.Among the sectoral indices. The market breadth was positive on the BSE with 975 gainers against 1.33 per cent.32 per cent).45 per cent).35 per cent) were among the gainers pack. Jindal Steel (2.